Since 1 March 1996 in the Civil Code it has been regulated that an employee who is prevented from being able to perform work due to sickness, maintains the right to 70% of his last earned salary during a 52-week period.

Additionally, as of this date the WULBZ (Law extension duty to continued payment of salary at sickness) became effective. This law regulates that the continued payment of salary comes at the expense of the employer, who must continue to pay the employee during the first 104 weeks of sickness at (a minimum of) 70% of the salary. Supplement up to 100% of the salary has been permitted in the first sickness year.

In the second year up to 70% of the salary can continue to be paid. If deviated of this and a sick employee eventually will be entitled to government benefits under the WAO (Invalidity Insurance Act), it is possible that both the employee and employer are faced with financial sanctions.

Aforesaid amendments to the law can be a considerable threat to your financial position as an employer. With an Absenteeism Due to Sickness Insurance (Ziekteverzuimverzekering) you can insure yourself as an employer against your continued payment obligation.

Explanation

There are two different types of absenteeism Due to Sickness Insurances; the Convential Absenteeism Insurance and the Stop-Loss Absenteeism Insurance. Below a short description of both insurances follows;

Convential Absenteeism Insurance

The most important characteristic of a conventional absenteesim due to sickness insurance is the "own risk" part of the insurance that is expressed by the number of waiting days before the insurance pays out. If an employee is sick, a benefit takes place when the number of waiting days has expired. Standard waiting times are 10, 30 or 65 working days.

This insurance is most attractive for "small companies"; i.e. companies with less than 50 employees and remuneration up to € 1,000,000.

Stop-loss Absenteeism Insurance

The most important characteristic of a stop-loss insurance is that the own risk is expressed as a defined amount, the so-called "own conservation". This own conservation is a percentage of the remuneration sum and is calculated over the average absentieesm due to sickness over the past 3 years. The insurance starts paying when you have been paying more remuneration for sick employees than the own conservation.

This insurance is attractive for "large companies"; i.e. companies with more than 50 employees and a remuneration higher than € 1,000,000.

Our external advisors can advice you about the right insurance for you and help you arranging it.

Contact us for more details.